Medicaid Is Junk Health Care

‘I don’t think it’s going to be bullets and bombs that destroy the greatness of America,” House Budget Committee Chairman Jodey Arrington (R., Texas) recently said on a Fox News podcast. “I think it will be our insatiable appetite to spend and our lack of political courage to rein it in.”

House Republicans have released their plan to rein in spending on Medicaid, the federal program that 70 million Americans use for health care at a price tag that’s projected to hit $1 trillion in the near future.

While not a popgun, the House GOP has at best manufactured a short-range pistol to aim at Medicaid. There are work requirements and some eligibility checks. This will help. Fewer than half of Medicaid recipients work enough to comply with a work requirement today. If more had to work, many of them would make enough money to be eligible for other insurance, and they would not need Medicaid.

Eligibility checks will help because over the past ten years, more than $1 trillion in improper payments within Medicaid have been made — whether it be the wrong payment to the wrong person or entity, or the wrong amount, or the wrong reason.

But the minimum share that the federal government contributes to state Medicaid programs (it pays 69 percent of the national tab) remains untouched, and there are no caps on federal spending per person for the program.

House Energy and Commerce Committee Chairman Brett Guthrie admits that many people will think the plan “doesn’t go far enough” but that moderates blocked key reforms: “We’re going to go as far as we can go to get 218 votes.”

It’s time to try something completely different. No matter how much Republicans blink and retreat from Medicaid reform, they will get endlessly hammered with TV ads calling them heartless between now and the midterm elections. It’s time they fight back, expose the Medicaid program for the shoddy, substandard care it provides, and propose alternatives that will improve real outcomes for Medicaid patients.

When it began in 1965, Medicaid was designed to provide health care for the disabled, the elderly who couldn’t afford Medicare, and low-income children.

But the creation of Obamacare distorted and drove that mission off course. It expanded Medicaid by paying for 90 percent of the cost of able-bodied adults added to the program. That created an enormous incentive to sign people up in the 40 states that have expanded Medicaid under Obamacare. In those states, the federal government is paying 90 percent of the cost of able-bodied adults, but only an average of 57 percent of the cost of adding people from other groups.

This has created a broken program. A disabled child gets $1.33 in federal support for every state dollar, and there are 700,000 disabled children on waiting lists. But in New York alone, because of the incentives to join, as many as 3 million people are on the program despite being above normal income limits.

John Goodman, a think tank president who helped create the highly successful federal Medical Savings Account program, has ideas that, if implemented, would actually make Medicaid a more rational program that would provide better health care for recipients.

Goodman points out that Medicaid patients are second-class citizens in our health care system. Many doctors refuse to take Medicaid patients because reimbursement rates are so low. When new patients sign up for Medicaid, their visits to the emergency room go up by 40 percent. Parkland Hospital in Dallas (the city’s safety-net hospital) says the average in-and-out time in their emergency room is almost six hours, wreaking havoc with the schedules of patients who work.

Goodman says we can give Medicaid enrollees access to the same kind of care that middle-income patients receive and save real money in the process.

Among his ideas:

1. Let people buy health care the way they buy food with food stamps. If they go to a community health center or an ER, they pay Medicaid rates. But if they go to an urgent-care clinic or any private-practice doctor, they can add to the Medicaid rate with cash and pay the market price. This gives them access to the same type of care that is now only available to other patients. This practice is currently illegal.
2. Allow people to have a Roth Health Savings Account. Medicaid managed-care insurers should be able to make deposits to health savings accounts (HSAs) so that patients can then draw on them to provide for routine or emergency medical needs.
3. Give Medicaid patients access to direct primary care. This is 24/7 access along with a doctor’s phone number. Medicaid could supply the funds or let Medicaid enrollees make monthly payments from their Roth HSA. Doctors would compete for their business. (The cost in many Midwest cities is $50 a month for a mother and $10 for a child.)

The upcoming budget battle may be the last opportunity that Republicans have in a generation to “bend the curve” of Medicaid spending and improve outcomes. In the past 70 years, the GOP has had the trifecta of control over the White House, the Senate, and the House only three times: between 2002 and 2006, between 2016 and 2018, and since last November.

If not reform now, when will it be possible again?